Business Groups’ Suit Comes at a Time of Rampant Conflicts of Interest at National Labor Relations Board

WASHINGTON, D.C. (December 7, 2021) – On December 6, the International Franchise Association and U.S. Chamber of Commerce filed a motion to intervene in federal court in the case SEIU v. NLRB in defense of the franchise business format. The case—in which the Service Employees International Union has challenged the NLRB Joint Employer Rule—is of critical importance to any number of business relationships including franchisor-franchisee, user-supplier, lessor-lessee, parent-subsidiary, and contractor-subcontractor, among many others.

“Following the refusal of new NLRB members David Prouty and Gwynne Wilcox—who most recently served as SEIU lawyers—to heed calls from Members of Congress to recuse themselves from cases brought by SEIU, the International Franchise Association believes intervention is an unfortunate necessity,” said IFA Senior Vice President for Government Relations and Public Affairs Michael Layman. “Our motion to intervene seeks to defend the common sense joint employer standard that protects local business owners’ livelihoods amid new NLRB members’ clear conflicts of interest.”

Joint employer status under the National Labor Relations Act was thrown into disarray by a controversial decision made in 2015 when a divided NLRB proposed a vague and complex standard to determine employment status. A subsequent 2020 rulemaking addressed the harmful impact of the 2015 decision by returning to and refining NLRB’s traditional approach to joint-employer determinations.

Layman continued, “The 2020 Joint Employer Rule provided legal clarity to all stakeholders, and it should be preserved. By seeking to overturn this common-sense standard, the SEIU is taking advantage of the new NLRB appointees to implement its policy agenda through unelected, unaccountable, and clearly conflicted agency officials. On behalf of 7.6 million Americans employed by local franchise businesses, IFA is taking action in federal court to defend our members’ livelihoods against this coordinated effort hostile to the franchising community.”

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About the International Franchise Association

Celebrating 60 years of excellence, education, and advocacy, the International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the more than 733,000 franchise establishments that support nearly 7.6 million direct jobs, $674.3 billion of economic output for the U.S. economy, and 2.5 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.

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